BURLINGTON, Wash., April 29, 2019 (GLOBE NEWSWIRE) -- Savi Financial Corporation, Inc. (OTC Pink: SVVB), the bank holding company for SaviBank, today reported first quarter 2019 earnings were $525,000, or $0.12 per diluted share, compared to $661,000, or $0.17 per diluted share in the first quarter of 2018.  Profitability was supported by 26% loan growth and 25% deposit growth year-over-year, excellent asset quality and an expanding net interest margin in the first quarter of 2019 compared to a year ago. 

“We started 2019 with a solid first quarter, opening two new branches, and our momentum continues to build,” said Michal D. Cann, Chairman and CEO.  “We generated 26% year-over-year loan growth and 25% deposit growth by expanding our franchise base and taking advantage of disruptions in our market.  Operating results were lower compared to a year ago due to higher operating costs and fluctuations in SBA loan premiums.  We remain confident that our expanding branch network will support growing revenues and profitability going forward.”

“While our net interest margin remains healthy and above industry averages, it was further enhanced during the first quarter of 2019 due to one-time interest earned from a loan swap,” said Cann.  Net interest margin improved to 4.54% in the first quarter of 2019, of which 23 basis points was attributable to the above-mentioned one-time loan swap.  This compares to net interest margin of 4.48% in the preceding quarter, and 4.30% in the first quarter a year ago.  The net interest margin is significantly better than the peer average of 3.77% posted by the 485 banks that comprised the SNL Microcap U.S. Bank Index at December 31, 2018. 

Total revenue, consisting of net interest income and non-interest income, increased 16% to $3.29 million in the first quarter of 2019, compared to $2.83 million in the first quarter a year ago, and increased 3% from $3.19 million in the fourth quarter of 2018.  

“While our SBA production is down compared to a year ago, our lending team continues to expand its leading relationships,” said Andrew Hunter, President.  SBA and USDA loan production for the twelve months ended March 31, 2019 totaled 20 loans for $9.00 million, compared to production of 25 loans for $12.82 million in the year-ago period.

First Quarter 2019 Highlights (at, or for the periods ended March 31, 2019, December 31, 2018, and March 31, 2018)

• Pretax income was $667,000 in the first quarter, compared to $839,000 in the first quarter of 2018, and $855,000 in the fourth quarter of 2018.
  
  
• Earnings per diluted share were $0.12 in the first quarter, compared to $0.17 in the first quarter a year ago and $0.16 in the preceding quarter.

• Net interest income increased 34% to $2.95 million in the first quarter of 2019, compared to $2.20 million in the first quarter a year ago, and was up 11% from $2.67 million in the fourth quarter of 2018. 

• Average first quarter total loans increased 27%, to $231.6 million, compared to $182.6 million a year ago, and grew 8% from $214.2 million in the fourth quarter of 2018.  Total loans at March 31, 2019, increased 26% to $234.2 million from $185.8 million a year ago and grew 3% from $227.6 at December 31, 2018.

• Average first quarter total deposits grew 23% to $220.5 million from $179.9 million in the first quarter a year ago and increased 8% from $204.5 million in the fourth quarter of 2018.  Total deposits at March 31, 2019, grew 25% to $232.6 million from $186.2 million a year ago and grew 12% from $208.4 million at the end of the fourth quarter of 2018.  
  
  
• Asset quality remained strong with nonperforming loans of 0.11% of total loans at March 31, 2019. This compares to nonperforming loans at 0.01% of total loans at March 31, 2018, and no nonperforming loans at December 31, 2018.  Nonperforming assets (“NPAs”) were 0.21% at March 31, 2019, compared to 0.22% a year ago and 0.16% three months earlier.  The current NPAs reflects the stability of the loan portfolio and paydowns in principle balances.
  
  
• Net recoveries were $7,000 in the first quarter of 2019, compared to net recoveries of $2,000 in the first quarter a year ago and net charge-offs of $4,000 in the preceding quarter. 
  
  
• Allowance for loan losses, as a percentage of total loans, was 1.01% at March 31, 2019, compared to 1.05%, at March 31, 2018.
  
  
• SaviBank capital levels remained above the threshold for well-capitalized institutions. The total risk-based capital ratio was 12.64% and the tier-1 leverage ratio was 10.67%. 

“Our branch expansion strategy is on track, as we continue to take advantage of the disruption in our markets by expanding our network in the Pacific Northwest and hiring key talent,” said Cann.  “We opened two new full-service branches during the first quarter, with the Sedro Woolley branch opening in March and a Mt. Vernon branch opening in January.  We also relocated our main Burlington branch in March.  In addition, we are in the process of building out a new Oak Harbor branch, which is operating in temporary facilities until the new branch is completed.”

About Northwest Washington

SaviBank currently operates four branches and one loan production office in Skagit County, two branches in Island County, and one branch in Whatcom County. As we referred to above, additional branch expansion is anticipated in the second quarter of 2019.

According to USNews.com, Washington state ranked 6^th overall and came in 3^rd for the best economy in the nation.  Washington also ranked 2^nd in the nation for healthcare, 6^th for education and 4^th for infrastructure. 

The Skagit, Whatcom and Island counties region stretches north from the greater Seattle/Everett/Bellevue metropolis to the Canadian border.  Northwest Washington continues to be one of the most vibrant regions in the country, with a solid employment base, moderate climate and a strong housing market.  According to a study by Sperling’s Best Places and published by Farmers Insurance, Bellingham Washington is the 3^rd safest mid-size city and Mount-Vernon-Anacortes is the 17^th safest small city in the United States.

The housing market in Skagit, Island and Whatcom Counties remains healthy.  According the Northwest Multiple Listing Service, the average home in Skagit County sold for $364,950, up 5.14% in March 2019 compared to a year ago, and there was a 2.58 month supply of homes on the market.  For Island County, the average house sold for $357,500, up 5.24% from a year ago and supply totaled 2.28 months.  For Whatcom County, the average home sold for $358,750, up 3.99% from a year ago and supply totaled 2.18 months

Skagit County’s economy is dominated by manufacturing, which accounts for 33.4% of GDP with food, machinery and oil and petroleum products the leading contributors.  Skagit’s population is projected to grow 5.46% from 2019 through 2024, and median household income is projected to increase by 12.54% during the same time frame.  

Whatcom County is home to Western Washington University and is the nation’s largest producer of raspberries.  Whatcom County’s population is projected to grow 6.22% from 2019 through 2024, and median household income is projected to increase by 9.64%. 

Island County is home to Naval Air Station Whidbey Island. According to the Whidbey Island Air Station fact sheet, “the direct economic impact of the air station on Whidbey Island is close to $600 million, comprising 88 percent of all economic activity and 68 percent of all county jobs. That impact is expected to grow in the near future as the base prepares for the arrival of the Navy’s new Maritime Patrol and Reconnaissance (P-8 Poseidon) and additional Expeditionary Electronic Attack (EA-18 Growler) squadrons.” Whidbey Island’s population is 85,018, with approximately 23,000 in Oak Harbor.  Island County’s population is projected to grow 5.07% from 2019 through 2024 and median household income is projected to increase by 13.48%.

Sources:

http://www.northwestmls.com/library/CorporateContent/statistics/Recaps.pdf
www.snl.com
https://www.usnews.com/news/best-states/rankings
https://www.bestplaces.net/docs/studies/secure.aspx
https://www.cnic.navy.mil/content/dam/cnic/cnrnw/pdfs/NASWIfactsheets/Whidbey%20Fact%20Sheet%20for%20final%20review.pdf

About Savi Financial Corporation Inc. and SaviBank –

Savi Financial Corporation is the small bank holding company of SaviBank. The Bank began operations April 11, 2005, and has seven branch locations in Burlington, Bellingham, Mount Vernon, Oak Harbor, Freeland and Sedro-Woolley, Washington, and a loan production office in Anacortes, Washington. The Bank provides loan and deposit services to customers who are predominantly small and middle-market businesses and individuals in and around Skagit, Island, and Whatcom counties.  As a locally-owned community bank, we believe that when everyone becomes Savi about their finances, our entire community benefits.  Call us or stop by one of our branches and we’ll show you how to bank Savi.  For additional information about SaviBank visit http://www.savibank.com.

Forward Looking Statement

This release may contain “forward-looking statements” that are subject to risks and uncertainties. Readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. All statements, other than statements of historical fact, regarding our financial position, business strategy and management’s plans and objectives for future operations are forward-looking statements. When used in this report, the words “anticipate,” “believe,” “estimate,” “expect,” and “intend” and words or phrases of similar meaning, as they relate to SaviBank or management, are intended to help identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although we believe that management’s expectations as reflected in forward-looking statements are reasonable, we cannot assure readers that those expectations will prove to be correct. Forward-looking statements are subject to various risks and uncertainties that may cause our actual results to differ materially and adversely from our expectations as indicated in the forward-looking statements. These risks and uncertainties include our ability to maintain or expand our market share or net interest margins, and to implement our marketing and growth strategies. Further, actual results may be affected by our ability to compete on price and other factors with other financial institutions; customer acceptance of new products and services; the regulatory environment in which we operate; and general trends in the local, regional and national banking industry and economy, as those factors relate to our cost of funds and return on assets. In addition, there are risks inherent in the banking industry relating to collectability of loans and changes in interest rates. Many of these risks, as well as other risks may have a material adverse impact on our operations and business.